Wachovia Opens Bank Account Without Permission, Starts Charging Fees

By consumeristcareyApril 20, 2008

John can’t understand how Wachovia charged his startup $12 in fees for failing to maintain a minimum balance when his company never opened an account with Wachovia in the first place. Apparently, his former bank manager decamped to Wachovia and, without his permission, opened a new account “to ensure certain money rates,” whatever that means. John isn’t mad, and the bank manager agreed to close the account, but John is a little worried because a collections agency has started calling and the account now lists $24.05 in fees.

John doesn’t know how the account was opened without his permission, but the former bank manager did have the relevant information needed to open an account. John writes:

We are a startup company that is currently out doing a Series B raise in order to commercialize a product we have in-licensed. The bank manager from our current bank left to join Wachovia. We were always happy with his service and we were not surprised when he contacted us and tried to get us to switch our banking to Wachovia. We indicated that the current timing was not good due to our financing. What we did not know was that he took upon himself to open an account for the company “in order to ensure certain money rates”. Boy were we surprised when we got a $12 fee for being below the minimum balance requirements. We joked that as a startup it was nice to know that our “future bank” would be more than happy to take our last $12 as a fee. We contacted our banker friend and he said he would close the account. We are now up to $24.05 in fees and a collection agency has called. Needless to say Wachovia will not be getting our business.

Wow, what a hassle. Invoice the fees to your former bank manager and use the proceeds to pay off Wachovia. Or threaten to call his new boss.

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As far as I am concerned, if someone opens an account in my name without my permission–bank manager or not–it is fraud. If your issues with the collections agency aren’t resolved, call the cops to report identity theft, then sue the bank for damages.

I’ve experienced something similar, when I opened a savings account and the bank told me that I was “pre-approved” for a credit card. I told them I didn’t want it, but several weeks later, a credit card showed up in my mail. When I called to complain, the bank sent me to their ordinary CC retention department. Fortunately, I then decided to call the bank to report “identity theft.” Their fraud department took my info and immediately closed the unauthorized account and had it removed from my credit record.

This sounds like the sort of thing you should talk to a lawyer. IANAL myself, but it sounds to me like this guy probably violated federal banking regulations in doing this, and the fact that it’s now impacting your companies credit probably makes it a much more serious federal offense. You might not want to pursue legal options against the bank given your past relationship with this guy right off the bat, but a letter from your lawyer to his bank should give them enough incentive to resolve this from their end ASAP given it’s entirely their own fault. If they don’t resolve this in a timely manner then your lawyer should definitely pursue all legal options.

Forget the DA, Find out who is the regional bank examiner with the Federal Reserve. Also who is your State examiner as well. File complaints in both places. At a minimum a State law has been broken if not federal.

“As far as I am concerned, if someone opens an account in my name without my permission–bank manager or not–it is fraud.”

Not necessarily. I have a power of attorney over my elderly and disabled mother. If I need to open or close a bank or investment account in her name, I can. There are a few things you *can’t* do with a POA (sell her house, vote on her behalf in an election, give court testimony in her name), but with the exception of refinancing her house, I’ve never needed anything but the POA in the seven years I’ve been taking care of her finances.

Also, this tale about BoA makes mention of a startup business. Seems to me that anyone who was a corporate officer (assuming there were any) could open a bank account for the business without needing the principal’s say so. Of course, circumstances would have an impact, YMMV and IANAL.